Eurozone growth accelerates

29th of June 2011

The economy of the 17 countries in the eurozone grew by 0.8 per cent in the first three months of 2011, up from 0.3 per cent in the previous quarter. Germany was largely responsible for the figure - which was better than expected - reporting growth of 1.5 per cent.

Debt-laden Greece surprisingly showed growth of 0.8 per cent, while France grew by one per cent, and Italy and Spain by 0.1 and 0.3 per cent respectively. Portugal slid into recession after contracting for the second quarter in a row.

"This is almost certainly as good as it gets for the eurozone and growth seems likely to moderate over the coming months in face of significant headwinds," said Howard Archer at IHS Global Insight.

Italy's growth figure was worse than expected, with the 0.1 per cent rate the same as it was for the last three months of 2010. Last month, the country's government cut its growth forecast for the whole of 2011 from 1.3 per cent to 1.1 per cent.

The rise in Spain's latest quarterly growth rate to 0.3 per cent from 0.2 per cent in the previous quarter is more encouraging as the country tries to avoid a third consecutive year of contracting GDP.

Figures from Germany showed exports and imports had both risen to their highest monthly level since records began in 1950. Domestic demand is said to be one of the strongest drivers for growth.

Good news from France too - its growth rate was the fastest it's been since the second quarter of 2006.